The downtrend continued for the main Wall Street indexes on Friday, although in the first half of the session they showed signs of reaction, with the Dow making slight gains and the Nasdaq fighting for the positive sign and the defense of 14,000 points. Finally, all three indices succumbed to the downward traction created this week by the high levels of government bond yields and the weak fourth-quarter corporate results that have been announced so far.
Shares in the tech industry were still negative, with Netflix collapsing by more than 20% due to of the weak prospects of growth of its subscribers in 2022 announced on Thursday.
Thus, on the dashboard the industrial Dow lost 1.3% or 450 points at 34,265.37, the widest S&P 500 fell by 1.89% to 4,397.94 points and the technological Nasdaq fell by 2.72%, falling below the psychological threshold of 14,000 points, to 13,768.92 points.
From 30 shares which make up the industrial index, only 4 closed with a positive sign and 26 with a negative one. The gains were led by Mc Donald’s (+ 0.57%), while the biggest losses were recorded by Walt Disney (-6.92%), Boeing (-4.15%) and Visa Inc (-3.90%).
The focus was also on her share Peloton, which rose by 11.73%, after CEO John Foley reacted to media reports that spoke of reduction of its production and redundancies, which caused a drop of 23% during yesterday’s meeting.
“Wild” week for the American market
All three indices recorded heavy losses on a weekly basis. In particular, o Nasdaq recorded the fourth consecutive week with losses and recorded the largest declining series since 2021. The technological index fell by 7.6%, which is its worst weekly performance since the corresponding period ended March 20, 2020.
The Nasdaq entered correction area on Wednesday, and with today’s losses has fallen 13% from a record high in November.
Nasdaq has been losing 11% since the beginning of 2022, at the worst start of the year since the 2008 financial crisis.
THE S&P 500 noted losses for third consecutive week, as he slipped against 5,7%, at its worst weekly performance since March 2020, according to FactSet. THE Dow took a dip 4,6% at 5 days, in its worst week since the corresponding period ended on October 30, 2020.
The investment climate was aggravated by the negatives this week corporate results which came mainly from the banking sector, while yesterday the Netflix announced much weaker than expected growth numbers of its subscribers. Its share “sank” by 21.79% today, while its competitor Disney (with Disney + and Hulu services) lost about 7%. Streaming device maker Roku fell 9.1%.
Peter Cardillo, an analyst at Spartan Capital, said the weaker prospects announced by the big names in the banking industry set the tone for the last Wall meetings. “Nevertheless, we are at the beginning of this round of announcements and we expect that the overall picture of corporate results will strengthen the fundamentals of the market, thus mitigating the blow from increasing bond yields,” he said.
“So far in January, the upward revisions for corporate results fell to 58.6% from 71.8% in December and 70.7% in November, and against a very high 82.3% in August,” they said. Citigroup analysts in their report.
“Strengthening the revision momentum could play a catalytic role in a positive market reaction,” Citi analysts said.
In addition, concerns about a more aggressive tightening of monetary policy by the EU intensified this week. Federal Reserve in order to curb rising inflation, which hit growth and technology stocks vulnerable to changes in interest rates.
The meeting of the Fed’s monetary policy committee is scheduled for next week, with the market considering the possibility of interest rate hikes starting from January very small. Analysts’ convergent estimates already estimate four interest rate hikes of 25 basis points each in 2022.
In the meantime, his performance 10-year government bond The US fell by about 10 basis points on Friday, just below 1.75%, but since the beginning of the year has jumped by about 25 m. b. On Friday, the American dollar lost 0.1%, however retained gains of 0.5% per week.